Wind finally blows in right direction

Geoff Henderson has been pushing the virtues of windpower for 15 years. Picture / Brett Phibbs

Geoff Henderson telephones from a Dunedin hotel room. He's on the road, travelling up and down the country giving a series of presentations pumping Windflow's latest rights issue to potential investors.

Windflow's core business will be building windmills and selling them. NZ Windfarms will buy them, own them and be an electricity generator.

His care with shareholders' funds is demonstrated by the polite request for the Business Herald to call him back for the interview: these hotels and their telephone call charges ...

As a young man, Henderson, the son of a civil engineering academic, realised that his enthusiasm for renewable energy would not be much good without some good way of putting it into effect.

"I knew that if I wanted to do something about renewables, then I had to become an engineer."

After graduating with honours in mechanical engineering from the University of Canterbury, he spent three years in Auckland working for a firm of engineering consultants.

In 1984, Henderson moved to California, finding work as a site mechanical engineer at a wind farm at Altamont Pass, 80km east of San Francisco.

After two years working at Altamont Pass, Henderson moved to England, where he worked for a company, Wind Energy Group, which developed new wind-turbine technology. It was here that he became familiar with the design innovations that have become the core assets of Windflow. One of these is the two-bladed turbine, which is much lighter and less expensive to build and install.

Trying to match the prices of a Government-backed industry in Denmark provided the competitive push that got this technology off the ground.

"We had a really good three-bladed design," says Henderson. "We put up 20 of them in California, we were competing against the Danish industry.

"We in the UK weren't subsidised so we couldn't compete because the playing field wasn't level - so we came up with a two-bladed design to be lighter and more cost effective - and it worked. It worked well."

Henderson was put in charge of the then-unproven technology in 1987. "I was bit of a reluctant convert actually, but I became a convert and I am convinced to this day that it's the way to go in terms of achieving a more cost-effective design.

"For a while, I thought I'd been given a bit of a hospital pass. It was something that seemed too good to be true."

He then invented the "torque-limiting gearbox system" - with the help of a 250,000 ($641,000) grant from the British Department of Energy. New Zealand patents for this technology are held by Henderson and form a crucial component of Windflow's intellectual property.

This gearbox eliminates many of the problems of power quality and integration that windfarms cause when feeding energy into the national grid.

Returning to New Zealand, Henderson has been working to gain support from investors for his plans - with the first of the company's windfarms likely to be built early next year.

Things have not run smoothly though, with Windflow's first prototype turbine installed at Gebbes Pass near Christchurch running quickly into problems. It "rang like a bell", annoying neighbours and leading to expensive and time-consuming investigations and repair work.

Earlier this year, the prototype nearly came tumbling down, with the gear box and rotor assembly wrecked by a rapid, strong wind shift.

Henderson says these problems, while not welcome, have led to a much better final design.

Windflow, of which Henderson owns 14.6 per cent, first listed on the alternative board of the New Zealand Stock Exchange in 2001 after raising $2.1 million. It has since raised another $5 million and is in the midst of a one-for-two rights issue, designed to raise up to $6 million.

Windflow shareholders are "not your normal investors" - not all "reef fish". Some invest because of their interest in the Green movement, others simply see it as a way of making money through new, smart technology.

He is not dissuaded by the dominance of the industry by Danish turbine-makers and General Electric, the other big player. "If you've got a better mousetrap, which I believe we have: then as the saying says, the world will beat a path to our door. That will become obvious once we've got the prototype back up and a few prototypes up on the hill and start building a track record."

There is also the potential for Windflow to license its technology to the big players. "In 10 or 20 years, we might be the giant killers of the industry," Henderson says.

"Last year, virtually 100 per cent of new baseload generation was windpower. Look at the projects announced - there's 1140MW announced. It's bringing in new players - the frustrating thing, having said this for 15 years, is that it's perfect for New Zealand, because of the small size of the economy."

Henderson believes the electricity market is crying out for more wind power.

Instead of a huge generator - such as a gas-fired 300MW or 400MW station being built every few years - smaller windfarms can be quickly and cheaply installed, matching annual demand growth of 100MW to 150MW. (New Zealand's biggest power station, the coal-fired Huntly plant, is a 1000MW station).

A smaller number of wind farm operators will also make the energy market more competitive, helping to break the dominance by the big integrated generator-retailers: Contact, Genesis, Meridian, Mighty River and TrustPower.

Just days after talking to the Business Herald, NZ Windfarms said it had reached an agreement with all those objecting to its Tararua farm project. It agreed to remove seven of the proposed 104 turbines from the project, satisfying locals' concerns about its visual effect.

Once the settlement is approved by the Environment Court, work can begin on the farm next year.

The wind-energy sector has emerged from its place on the fringes, with Henderson and Windflow now firmly in centre stage.

Windflow Tech

* Windflow Technology is listed on the NZAX, with a market capitalisation of $12.8 million.
* It builds and sells two-bladed wind turbines.
* A wholly-owned subsidiary, NZ Windfarms, is developing a new windfarm near Palmerston North, using the turbines.
* NZ Windfarms will eventually be spun off and separately listed.
* Engineer Geoff Henderson, 46, founded Windflow and owns 14.6 per cent of its shares.